Massachusetts Bay Transportation Authority

This is a State Auditor report reviewing selected MBTA construction and contract issues from July 1, 1996 through December 31, 1999.

“Our audit, which covered the period July 1, 1996 to December 31, 1999, was conducted in accordance with applicable generally accepted government auditing standards for performance audits.”

Auditors looked at whether MBTA construction costs were reasonable, what happened with the proposed South Station moving walkway, how surplus locomotives were handled, and whether earlier audit problems were fixed.

“The objectives of this audit were to:”

When work is not planned properly before bidding, the public agency may pay more because extra work is negotiated instead of competitively bid.

“Moreover, when extra work is not properly planned for and included in the original contract’s scope, contractors are allowed to submit their cost proposals for the extra work based on a negotiated “lump-sum” price, and therefore extra work is not obtained through a competitive bid process.”

For riders and taxpayers, the report says planning failures may have caused avoidable costs and inconvenience at South Station.

“Moreover, as a result of these conditions, commuters using the South Station Transportation Center have been unnecessarily inconvenienced due to the MBTA’s inability to properly plan and supervise this work.”

The Auditor concluded that MBTA planning and oversight problems led to costly change orders, weak recoveries from designers, and an inadequate credit for not building the moving walkway.

“Project files that we reviewed clearly indicate that these cited cost overruns were the direct result of either designer error or a failure to properly plan between MBTA departments (construction and operations), between MBTA’s construction department and SSTC’s management company; and between the MBTA and the MHD.”

The report recommends stronger project planning, better design oversight, and efforts to recover money from design engineers when their errors caused extra costs.

“Every effort is made to recoup from its design engineers for these two contracts the $4 million in added construction costs that were incurred by the MBTA due to errors and omissions in the contracts plans and specifications.”

The report points to a recurring issue: MBTA construction work was sometimes added without competitive bids, including a prior audit finding involving $10.8 million in extra costs.

“Our prior audit report No. 97-0583-3 indicated that the MBTA incurred approximately $10.8 million in additional construction costs associated with the completion of the Old Colony Line’s Plymouth and Middleboro branches for work that was not contained in the original contracts’ specifications and scope of work.”

A change order means a later contract change for added work; here, the report says about 200 negotiated change orders added work that was not in the original South Station contracts.

“These contracts were subsequently amended by approximately 200 negotiated change orders to include additional work not contained in the contracts’ original work specifications.”